When Is the Mover-Design Event Study Coefficient a Place-Effect Share?

Vahid Moghani
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Vahid Moghani: Erasmus University Rotterdam

No 26-056/III, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Mover-design event studies are a leading approach to separating place effects from sorting. The coefficient is often interpreted as the share of cross-sectional variation in location means due to places. I show the coefficient depends on how movers connect locations: two economies can be identical in place effects, sorting, and location means, yet deliver different mover coefficients. Only under directional isotropy, a testable condition, does the coefficient permit a cross-sectional reading: it averages the variance share of place effects and the share that equalizing them removes. An illustration in Dutch employer–employee wage data rejects the condition.

Keywords: mover design; place effects; two-way fixed effects (search for similar items in EconPapers)
JEL-codes: C23 C52 J31 (search for similar items in EconPapers)
Date: 2026-08-11
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